Republic file photo Home buyers have begun to experience some relief in the housing market as median home prices have dropped in the Bartholomew County area.
Local home buyers saw some relief last month as the median home price in Bartholomew County fell just over 9% from a year ago driven in large part by interest rates and an increase in available inventory, according to local Realtors and national real estate brokers.
The median sales price of a home in Bartholomew County was $255,000 last month, down from $281,000 in July 2023 and $267,000 in July 2022, according to the latest data from national real estate broker Redfin.
The active inventory of homes in the county rose from 101 in July 2023 to 150 last month, a nearly 49% increase, according to Redfin. The number of homes sold also increased from 99 to 116 and the median time that homes were on the market rose from seven to 13 days over the same period.
“The market is pretty good for buyers right now,” said Jessica Risacher, a Realtor/broker at F.C. Tucker in Columbus. “…Last year was very much so a seller’s market, and now it’s just kind of favorable for both parties at this point.”
Bucking the trend
The decline in home sales prices in Bartholomew County bucks trends seen statewide and in some neighboring counties.
Statewide, the median sales price of homes in Indiana last month was $266,000, up 2.7% from $259,000 in July 2023, according to Redfin. The inventory of homes in the Hoosier State rose nearly 17% from 12,019 in July 2023 to 14,051 last month, while homes sales increased from 7,203 to 7,785 over the same period.
In Jackson County, the median sales price for homes was $225,000 last month, up 24% from $181,000 in July 2023. In Jennings County, the median sales price rose from $181,000 in July 2023 to $212,000 last month, a 17% increase.
Nationally, the median sales price for a home was $439,170 last month, up 4.1% year over year and just 0.7% below the all-time high, according to Redfin. At the same time, the number of homes sold declined 1.6% year over year and new listings rose by a seasonally adjusted 2.9% over the same period.
‘Very healthy’ market
While inventory has increased and median sales prices have decreased, Risacher still characterized the Bartholomew County real estate market as “very healthy” with a “nice inventory selection for buyers” at various price points, including what she described as higher-than-normal inventory of luxury homes. Currently, there are 12 homes on the market in Bartholomew County priced at more than $1 million.
“Even though we do have more inventory in the market and the pricing has slightly gone down, (the time on the market) is still very healthy, only a week more than last year,” Risacher said.
Risacher said she was unsure what might be driving more people to put their homes on the market last month than a year before but said her office continues to see “a lot of corporate relocation in and out of Columbus.”
“We always see a lot of corporate relocation in and out of Columbus, with having a nice industrial market in our area with Cummins,” Risacher said. “But it could be that this is related to job transfers. We’re seeing a lot of relocation to Texas and some of those (Sun Belt) states.”
Interest rates
However, the current dynamics in the local housing market may not last for long.
Last month, Federal Reserve Chair Jerome Powell set the stage for the central bank’s first rate cut in four years, citing greater progress toward lower inflation as well as a cooler job market that no longer threatens to overheat the economy, according to wire reports.
Still, the Fed kept its key interest rate unchanged at a 23-year high of 5.3%, despite calls from some economists and Democratic politicians to implement a cut. Instead, Powell said that, if inflation continues to fall, “a reduction in our policy rate could be on the table” when the Fed next meets Sept. 17 and 18.
A rate cut by the Fed is unlikely to have much immediate impact because it is largely expected by financial markets. Yet over time, lower Fed rates should reduce borrowing costs for consumers and businesses, including mortgage and auto-loan rates.
Most economists expect the average rate on a 30-year home loan to remain above 6% this year, according to wire reports. That may not be enough for many prospective homebuyers in the face of record-high home prices and a shortage of properties for sale in many markets.
Still, if rates ease further and the supply of homes on the market keeps rising, that could set the stage for improved sales in coming months. Still, if rates ease further and the supply of homes on the market keeps rising, that could set the stage for improved sales in coming months.
Roughly 86% of all outstanding home mortgages have an interest rate of 6% or below, and more than three quarters have a rate 5% or lower, according to AP, which cited figures from Realtor.com.
“We’re being told that we may see rates as low as 5 (percent) in the first quarter of next year,” Risacher said. “Even though rates did slightly drop recently in the last two weeks, we’re not seeing a whole lot of movement with buyers. …Back-to-school generally slows down the market a little bit. …But also, I think with it being an election year, a lot of buyers are assuming that the (interest) rates may continue to drop closer to November.”
“Right now is a good time to buy,” she added. “You can always refinance later when the rates do come down. But if you wait for the rates to come down in the fives, there is going to be a lot of competition.”
